sustainability

Article
A Managerial Analysis of Urban Parcel Delivery:
A Lean Business Approach
Luce Brotcorne 1 , Guido Perboli 2,3,4 , Mariangela Rosano 2,3, * and Qu Wei 2
1 INRIA Lille—Nord Europe, Parc scientifique de la Haute Borne 40, av. Halley-Bât A,
59650 Villeneuve d’Ascq, France; Luce.Brotcorne@inria.fr
2 ICT for City Logistics and Enterprises Center, Politecnico di Torino, 10129 Turin, Italy;
guido.perboli@polito.it (G.P.); qu.wei@polito.it (Q.W.)
3 CARS@Polito, Politecnico di Torino, 10129 Turin, Italy
4 CIRRELT, Pavillon André-Aisenstadt, Montreal, QC H3T 1J4, Canada
* Correspondence: mariangela.rosano@polito.it; Tel.: +39-011-0907083




Received: 6 May 2019; Accepted: 7 June 2019; Published: 22 June 2019


Abstract: The improper integration of traditional transportation modes with low emissions vehicles
can generate a price war that reduces the service quality, undermining the efficiency and the
profitability of parcel delivery operators. This paper aims to provide managerial insights to design
a win-win strategy for the co-existence of traditional and green business models. In doing so,
we adopt a multi-disciplinary approach that integrates a qualitative analysis through a Lean Business
methodology, named GUEST, with a quantitative analysis based on simulation-optimisation
techniques. This kind of holistic vision has received little attention in the literature. The first analysis
investigates the parcel delivery industry with an emphasis on the main business models involved,
their costs and revenues structures, while the quantitative part aims to simulate the system and
extract sustainable policies. In particular, results highlight that in deploying mixed-fleet policies,
the decision-makers have to focus both on the environmental sustainability that benefits from the
adoption of low-emission vehicles, and on the operational feasibility and economic sustainability of
the two services. In this direction, the paper suggests some managerial insights concerning the split
of the customer demand between traditional and green operators, according to the classes of parcels
and geographical areas of the city.

Keywords: Last-Mile Logistics; GUEST methodology; urban delivery

1. Introduction
Urban freight transportation and parcel delivery have been subjected to significant paradigm
shifts over recent decades, caused by the urbanisation and development of megacities. First, economic
development in the mid-1990s led the rise of faster-growing medium-large-sized companies that
specialised in the delivery of small parcels, giving birth to the Global Courier, Express, and Parcel (CEP)
market [1]. Since the 2000s, the advent of e-commerce and pervasive technologies changed the logistics
and freight transportation dramatically, with an increase of the deliveries to the Business-to-Consumer
segments in the urban areas and the competition of e-commerce giant platform to cope with the
increasing requests for fast and cheap deliveries. Moreover, the awareness of the environmental impact
of transportation activities as well as the significant congestion and environmental nuisances encourage
the use of non-motorized transport to move people and goods (e.g., bikes and cargo bikes), self-service
kiosks (i.e., lockers), and collaborative business models [2–4]. As [5,6] point out, the integration of
different delivery alternatives is unfortunately not simple due to the relationships and disputes among
actors, their business models and the technologies themselves.

Sustainability 2019, 11, 3439; doi:10.3390/su11123439 www.mdpi.com/journal/sustainability

Sustainability 2019, 11, 3439 2 of 23

To cope with the different issues of such a complex system, City Logistics and new domains,
such as the Physical Internet, provide initiatives to optimise the flow of traffic and jointly address
the economic, operative, social, and environmental sustainability of transportation and logistics,
mitigating the inefficiencies and externalities that characterize the last-mile segment of the supply
chain [7]. Despite the rich literature and state-of-the-art on City Logistics, not all solutions and
proposals are successfully implemented. Indeed, as [8,9] point out some City Logistics initiatives failed
due to the lack of support and commitment from the different actors (with diverse expertise) in the
urban areas. This gap is the result of the absence of a managerial view in the deployment of policies
for sustainable freight transportation and logistics. Indeed, usually implementation and proposal are
too focused on the technological aspects as platforms, or optimization tools, missing a global vision
and the lack between the business and operational models. To the best of our knowledge, a holistic
vision of such a complex and hyper-connected system that integrates an actors’ behaviour analysis,
economic and managerial considerations into simulation and optimisation tools, has little attention in
the literature. In particular, works by [3,10] represent first attempts to overcome this lack. The authors
in [10] developed a last-mile typology and an instrument to simulate the total last-mile costs.
Our contributions to the literature are the following:
• In terms of business models, cost and revenue schemes, and policies, we explore the
implementation of green transportation modes, considering integrating them with traditional
vehicles. This analysis is completely novel in the literature. Indeed, different contributions deal
with the new delivery options and green vehicles, but without considering their impact on the
efficiency and profitability of traditional models. In this direction, we recognize the different
players in the transportation and parcel delivery system, considering several configurations of
traditional vehicles (e.g., trucks and vans that use fossil fuel) and green modes (e.g., electric or
hybrid vehicles, bikes, and cargo bikes). We analyze their business models and behaviors from a
managerial perspective. In particular, this research adds to the literature on the issues related to
incorporating the new business models (e.g., green delivery operated using cargo bikes) with
traditional modes, an assessment conducted in the City of Turin (Italy).
• We derive an assessment for the computation of the cost-per-stop of a last-mile delivery operator,
independently on the vehicle type in use.
• We highlight as qualitative business management tools (e.g., Business Model Canvas and SWOT
analysis) provided by the Lean Business methodology named GUEST, can be useful to understand
the context and, gather information and data for solving the optimisation problem and designing
win-win strategies that avoid the risk of cannibalisation between models.
• We show how the mix of qualitative and quantitative models can be conjugate the results of the
business models and economic analyses proposed in this paper, with quantitative approaches
based on Monte Carlo-based simulation-optimisation.
The paper is organized as follows. Section 2 reviews the literature on the urban freight
transportation, identifying the main research challenges. Section 3 presents the methodology adopted
in this study, which is based on a Lean Business approach. Then, Section 4 describes the multi-actor
system of urban parcel delivery, presenting the business models of the participating actors.
The analysis of their cost structures in Section 5 brings depth of understanding to the operating costs
connected to the different types of vehicles. The results are summarized in Section 6, providing
relevant insights concerning the relationships between operators and defining mixed-fleet policies.
Finally, some conclusions are discussed in Section 7.

2. Literature Review
In recent decades, the researchers and practitioners become more aware of the issues that affect the
freight transportation and logistics in urban areas (e.g., traffic, pollution, increasing uncertainty,
atomisation of parcel flow [11]). Moreover, the “zero-emissions” challenge imposed by the local
authorities and European Commission fosters the researchers and practitioners to design and develop
Sustainability 2019, 11, 3439 3 of 23

solutions to make this complex system more innovative and competitive, while reducing its
inefficiencies and environmental impact. A consistent framework of the literature concerns the
sustainability of urban freight transportation and parcel delivery. Different papers in this framework
propose several measures grouped into four main categories [9,12,13]: material/infrastructural
(e.g., infrastructure reserved for freight operations as urban consolidation centers, lay-by zones etc.),
immaterial/technological (i.e., Intelligent Transportation Systems), governance/regulation (e.g., road
pricing, access times, maximum parking times, heavy vehicle networks, restricted access zones, “low
traffic zones” (LTZ), etc.) and collaborative systems (e.g., co-modality and multi-modality). This last
category includes solutions at the planning level that regard how the freight moves within the city,
fostering the collaboration among the different actors, transportation modes and integrating people
and freight. Many experiences in different cities [6,14–20] address the potential of multi-modality and
intermodality that integrate traditional vans with non-motorized vehicles as cargo bikes,
for sustainable urban freight transport, encouraging their diffusion.
Other contributions (e.g., [21,22]) propose mathematical models to schedule and optimize the
routing of heterogeneous fleet, considering costs and emissions.
As highlighted in the introduction, these contributions are focused on the technical aspects of the
problem, disregarding the managerial point of view and, thus, lacking of a strategic holistic vision.
Indeed, in our opinion, a gap in the literature is represented by a whole analysis of the business
model of the main actors in parcel delivery systems and their business development considerations,
including the discussion of costs schemes. In particular, the literature explores the implementation of
green transportation modes without taking into account their impact on the overall system in terms
of operations, costs and revenues, and policies when integrated with traditional modes. As above
mentioned, the works by [3,10] represent first attempts to simulate the last-mile costs.
This study addresses the following two main research questions:

• Is is possible and valuable to integrate business and operational models in urban parcel delivery,
through a multi-disciplinary approach?
• Which are the benefits and implications of the integration of traditional transportation modes and
low-emissions vehicles in the urban context?

Our study is the first attempt to fill the above discussed gaps in the literature. The strength of the
proposed analysis relies on a powerful mix of qualitative research from a business perspective of parcel
delivery systems, and operations of such systems, including interactions between international couriers
and third-party companies that manage the last-mile operations.

3. Methodology
As mentioned before, the literature on the parcel delivery systems is focused on operational facets,
disregarding the managerial considerations and links among the main players. To overcome this gap
in the literature, we adopt the GUEST methodology [23,24]. It is a Lean Business approach that arises
from the works by [25] and other lean startup framework, adapted to cope with multi-actor complex
systems (MACSs), such as urban freight transportation [4,26,27]. The GUEST methodology is used
to analyze the actors and stakeholders requirements from the beginning of the solution design and
considering them throughout the overall implementation. The result is a higher commitment from
the different actors and market acceptance of the outputs, generating network effect vital for the new
collaborative business models, overcoming the issues of current City Logistics measures, identified in
the Section 1.
The acronym GUEST derives from the five phases of the methodology, which have been attuned
to the urban parcel delivery context as follows:

• Go. In this phase, we analyse the operators in the last mile segment, investigating their company
profile, their current behaviour and, internal and external forces that interact with them and
Sustainability 2019, 11, 3439 4 of 23

affect their businesses. The aim is to collect data and information and provide a comprehensive
overview of the stakeholders’ profiles regarding their requirements and cost structures.
• Uniform. The information gathered in the Go phase must be expressed in a standard form to
achieve a shared vision of the MACS. In this phase, the governance mechanisms and business
models are investigated using the Business Model Canvas [25]. It is a graphical tool coming from
the lean startup movement and it shows how the proposed solution creates value in terms of
benefits, products and services, for the different stakeholders. Its strengths rely on its simplicity of
use and to highlight in an intuitive and understandable manner, how the integration of traditional
transportation modes and green vehicles can deal with the different operators needs and how
they can obtain benefits. Moreover, opportunities and threats of this integration are identified
using a SWOT analysis. It is a strategic planning method useful to identify strengths, weaknesses,
opportunities, and threats related to the different business models in urban freight transportation
and parcel delivery.
• Evaluate. For each transportation option, we explicitly define the cost and revenue structures.
Moreover, we conduct an in-depth assessment and comparison of business models, with focus
on the relevant links between business and operational model.
• Solve. Solve. The outcomes from the managerial analyses conducted in the previous phases
represented the inputs by means of the simulation-optimisation tool defined in [6]. The aim is to
get a global view of the complex system as a whole.
• Test. In this phase, we test and analyze the outcomes provided by the Monte Carlo simulation, to
design policies adequate for heterogeneous fleet.

As the authors in [3,28] point out, we can observe a lack of available realistic benchmark dataset for
testing City Logistics solutions. Indeed, the instances in the literature do not come from real or realistic
settings, but they are usually based on the generalisation of classical instances or artificial data often
not generated for urban applications, making difficult the assessment of new models. The reason of
such unavailability of real data relies on the poor commitment of the stakeholders and their availability
to share information as well as the high effort in terms of time and expertise needed to gather these
realistic data and to embed them in the decision-support systems. The data streams concerning the
business models, the cost structures, and the operations used in this paper are realistic and they
are provided by a worldwide parcel delivery company and by stakeholders respectively involved
in the two research projects URBan Electronic LOGistics (URBeLOG) and Synchro-NET [27,29,30].
In particular, we conducted interviews with the CEO, COO and marketing directors of the companies
operating parcel delivery in Italy, and an in-depth analysis of their financial statements, to obtain
information concerning the business models and costs structures.

4. Managerial Analysis of the Urban Parcel Delivery

The urban freight transportation and parcel delivery system involves multiple actors with
sometimes conflicting goals and objectives. We identify the following five main actors:

• International courier delivery services (hereinafter, International courier). It is the company that
manages the long-haul shipments at global and national levels.
• Traditional subcontractor. Once the goods coming from the long-haul shipments arrive at
the urban distribution centres located in the outskirt of the city, the traditional subcontractor
manages their deliveries in the last-mile segment. In the European market, it is usually a small
or medium-sized company, generally organised as a legal form of cooperatives with limited
financial and fleet capacity, as stated by [6].
• Green subcontractor. This is a small company that has a business model similar to those of the
traditional subcontractor. However, a strong component of its value proposition relies on the low
environmental impact of the transportation activities, thanks to the adoption of green vehicles as
the cargo bikes.
Sustainability 2019, 11, 3439 5 of 23

• Customer. This category refers to the final user of transportation services. We identify different
customer segment: business-to-business (B2B), business-to-consumer (B2C), consumer-to-business
(C2B), consumer-to-consumer (C2C), and intra-business.
• Authority. This actor refers to the local public administration that manages the city and designs
policies for freight transportation in urban areas. It seeks to reduce the environmental pollution,
traffic and congestion associated with the transportation activities, as well as their social costs,
while improving the quality of live in the city.

In this section, we present the analysis of the main industry-driven operators, investigating
their business profiles and interactions. In doing so, we adopt a business development approach,
based on the Business Model Canvas, which has not received relevant interest in the literature.
In particular, Section 4.1 discusses the business models of these operators, while Section 4.2 presents
the SWOT analysis.

4.1. Business Models in Urban Freight Transportation

Sections 4.1.1 and 4.1.2 discuss the business models of the international courier, traditional
subcontractor and green subcontractor, respectively.

4.1.1. Business Model of International Couriers

Figure 1 depicts the Business Model Canvas of the international courier. Its main customers can
be grouped in the following segments:

• B2B. It is composed by the firms that by means of couriers, move raw material, semi-finished or
finished products along their logistics chain towards other companies. This segment also includes
the e-commerce flows between e-retailers and between e-retailers and suppliers.
• Intra-business. It consists of the companies that uses courier services to move raw materials,
semi-finished or finished products among their different plants and warehouses.
• C2B. It is represented by the flows of goods coming from the reverse logistics (e.g., waste,
processing scarps, recycling end-of-life products, customer rejections).
• B2C. It comprises of companies selling products straight to end customers, bypassing
distribution chains.
• C2C. This segment is composed by all the orders from private people that require the
transportation of goods for personal needs.

The value proposition that the international courier offers is mainly the “time sensitive”
transportation of products, due to the critical role of timing (i.e., strict time windows), flexibility and
reliability of the delivery to cope with the increasing requests of the modern economy.
Another component of the value proposition is a superior customer experience thanks to the benefits
derived from shipment efficiency, speed, reliability, security (e.g., through “tracking and tracing”)
and customisation of the services received. International couriers usually manage the long-haul
shipments, serving the maritime and land transport. As different authors point out [27,31,32],
ports and surrounding maritime terminals act as integrated logistics centers vital for the sustainability
of urban distribution of goods. However, maritime transport is affected by different challenges related
to the growing fuel prices, congestion and traffic at port terminals, and environmental issues that
increase the complexity of the last-mile activities. Researchers have an increasing focus on new
solutions and models to reduce these issues, while improving the efficiency of operations in maritime
terminals, such as the synchromodality and slow steaming [27,31,33,34], and the optimisation of
berthing decisions [35]. Although maritime and land transport are strongly related, in this paper we
focus on the urban freight transportation. The international courier offers to the small and
medium-sized business customers, a cost optimisation service thanks to the express deliveries that
allow reducing the inventory level in a Just-In-Time orientation, and the sales market extension.
Sustainability 2019, 11, 3439 6 of 23

These time-sensitive delivery services represent the main source of revenues for the international
courier that can reach its customer segments through specific channels, as website, kiosks and retail stores.
The key resources required to make the business model work are similar to those of the other
players and they are mainly tangible assets (e.g., vehicle fleets and point-of-sale systems), intangible
assets (e.g., software, assignment and routing algorithms, licenses and partnerships) and the human
resources represented by the drivers.
The study by [36] identifies the management of processes and operations (e.g., route planning,
intermodal transportation, pickups and deliveries, monitoring) and the customer care (e.g., pre-
and after-sales support, tracking and tracing of parcels, proof of delivery), as key activities for the
international couriers.
The international courier establishes strong partnerships and alliances with the key partners
(e.g., suppliers, subcontractors, handling agents) to improve the efficiency of its current business
model, or developing new ones. Moreover, the international courier forms a close cooperation with
governmental organizations and local administrations to make urban parcel delivery more sustainable
and less pollutant (e.g., the URBeLOG project [29]).
The primary expenses incurred by the international courier in order to run the business model, are
the costs of the key resources (e.g., fuel costs, packaging, personnel costs, acquisition and maintenance
of vehicles, ICT systems), as well as the costs of marketing and advertising campaign, and the risk
management consultancy.

4.1.2. Business Model of Traditional Subcontractors

Figure 2 depicts the Business Model Canvas of traditional subcontractors. As discussed in Section 4,
international couriers outsource pickups, deliveries, and transportation activities in the last-mile segment
of the supply chain to subcontractor couriers, obtaining operational efficiency and customer proximity.
Indeed, the international courier benefits from an efficient and flexible management of urban parcel
delivery operations, particularly when peaks of demand and strictly temporal constraints typical of
certain events and conditions (e.g., prime customers, disaster relief [37]) exist.
Usually, traditional subcontractor reaches and activates a business with the international couriers
through long-term commercial agreements and tenders. Then, a constant negotiation and information
exchange along all transportation activities (e.g., tracking services and feedback) ensures the
relationship between these two actors, permitting the co-creation of value for the final user. Indeed,
the coordination with international courier customers represents a key activity, fundamental for the
success of multimodality and the well-functioning of the on-demand logistics, with the subsequent
satisfaction of final users. Other key activities for the traditional subcontractors concern the operations
management, as the optimal route planning and dispatching, to achieve high performance in the
service quality levels (expressed in terms of parcel delivered), while coping with the challenges such
as timeline constraints, the risk of delivery failure (approximately 12% of all deliveries) [38] and the
last-mile split delivery problem [39].

4.1.3. Business Model of the Green Subcontractor

New business models are raising to guarantee the sustainability and efficiency of urban
transportation, particularly of the parcel deliveries in the last-mile. Looking at the business model of
these companies (Figure 3), here named green subcontractors, we observe many similarities with those
of traditional subcontractors. However, a great part of its value relies on the adoption of green vehicles
(i.e., bikes and cargo bikes) to ensure a low environmental impact of transportation activities.
Thus, the main customer segment of the green subcontractor is the international couriers that
outsource last-mile operations. Other customers are represented by the B2B and B2C segments related
to the intercity and intracity postal services.
The green subcontractor offers to its customer segments a value proposition consisting of
cycle-logistics service, delivering small-sized parcels, with a weight between 0 to 3 kg, or up to 6 kg.
Sustainability 2019, 11, 3439 7 of 23

The adoption of cargo bikes and bikes allows to overcome the complexities that affect the parcel
delivery in the inner city (e.g., City Logistics regulation measures, low traffic zones, unavailability of
loading/unloading zones, traffic and congestion), and as a result, the customers can benefit from a
more flexible, fast, punctual and reliable service. Overcoming the complexity of the last mile segment
increases the economic performance of the international courier, who incurs in a cost optimization,
fundamental in this industry where margins are decreasing. Moreover, in line with the increasing
interest of communities to the environmental protection, the customer segments of the green
subcontractor obtain a green reputation and the consequent monetary gains, to achieve the goal of
sustainable supply chains.
The main channels through which customers are reached by the green subcontractors are websites
and green marketing campaigns that foster the awareness and knowledge of their services (e.g.,
interviews published in journals specialized in sustainable urban freight transportation). Once reached,
the green subcontractor maintain the relationship with its customers through regular information
flows and connected services (e.g., tracking services, feedbacks, computation of the CO2 savings).
The above mentioned value proposition provides the green subcontractor a revenue stream,
which is increased by the additional incomes from the CO2 savings and the carbon credit trading, and
fees and royalties from affiliates [6].
The business model of the green subcontractor requires a set of physical assets (i.e., bikes and
cargo bikes, warehouses), human resources (i.e., bikers) and intangible assets (e.g., partnerships to
protect the repeatability of the model by competitors, decision support systems and ICT tools to
optimize activities) [4]. In this model, the service quality and functioning are strictly dependent on the
performance of bikers, as well as fatigue and external factors (e.g., weather condition).
Sustainability 2019, 11, 3439 8 of 23

Figure 1. Business Model Canvas of an international courier.

Sustainability 2019, 11, 3439 9 of 23

Figure 2. Business Model Canvas of a traditional subcontractor.

Sustainability 2019, 11, 3439 10 of 23

Figure 3. Business Model Canvas of a green subcontractor.

Sustainability 2019, 11, 3439 11 of 23

4.2. Swot Analysis

In this section, we present the SWOT analysis related to the traditional subcontractor (Figure 4
and the green subcontractor Figure 5). The SWOT analysis identifies and assesses the internal
(i.e., inside the company) and external (i.e., in the eco-system) factors involved in the two business
models. Thus, due to the strictly connection between this analysis and the Business Model Canvas,
in this section we present a joint discussion of the results.
Although all business models propose a value proposition represented by time sensitive delivery,
we observe the outsourcing of logistics activities to subcontractor carriers. Indeed, as [6] point out,
the big international couriers companies internalize the long-haul transportation, while they entrust
the last mile activities to traditional and green subcontractors carriers, achieving operational and
economic efficiency, as well as the customer proximity.
The SWOT analysis (Figures 4 and 5) and the Business Model Canvas show that, for traditional
subcontractors, the main sources of weaknesses and threats are their impact on the environment
and the critical issues affecting European regions, like traffic and congestion, Low Traffic zones
(LTZ), and the unavailability of delivery bays.These factors compromise the delivery fulfillment,
inducing disadvantageous conditions (e.g., lack of parking areas) for couriers with traditional vehicles.
In contrast, these same points represent strengths for green subcontractors. The latter group uses
green vehicles such as bikes, in last-mile parcel deliveries, allowing them to earn additional income
from the emissions reduction and carbon credit trading, as shown in the revenue streams block of the
Business Model Canvas (Figure 3). However, the operational model of green subcontractors is affected
by capacity constraints of bikes, which bind the size of parcels that can be loaded, thus representing
the major limitation of this model. This constraint is partially overcome using next-generation cargo
bikes, which have a capacity of 100–150 kg per bike, according to estimates provided by [40] based on
Europe. The SWOT analysis highlights a threat related to the competition between traditional and
green subcontractors. This competition is also affected by the strategy of the international courier,
who can guide subcontractors using a financial lever [6]. The competition based exclusively on costs
between traditional and green subcontractors operating in the same geographical area originates a
price war, which reduces their profitability or their differentiation in terms of service quality perceived
by the final customer.
Moreover, according to [6], a comparable case could arise when the international courier internally
owns the fleet. Indeed, the partial organisational autonomy of local depot fleet managers and their
strategic cost-cutting goals might have comparable impacts to a price war between traditional and
green subcontractors.
Looking at the financial structure of each business model, the costs related to the vehicles and
the related social costs connected to the negative externalities have a huge relevance. For this reason,
we decide to investigate these costs by means of a further quantitative analysis presented in the
next Section 5.
Sustainability 2019, 11, 3439 12 of 23

Figure 4. SWOT analysis referred to the traditional subcontractor.

Figure 5. SWOT analysis referred to the green subcontractor.

Sustainability 2019, 11, 3439 13 of 23

5. Cost and Revenue Analysis of Vehicular and Cargo Bike Delivery

5.1. Operating Costs Analysis

The increasing awareness of the need for the environmental protection, and to increase the
efficiency of delivery activities while marginal revenues are decreasing have led the operators and
cities to experiment the green vehicles that use innovative propulsion systems (e.g., electric, hybrid or
methane vans). In our study, we consider four main alternative vehicles: gasoline-fuelled, diesel-fuelled
and totally electric vans, and cargo bikes.
This decision and the selection of the vehicles used for the benchmarking reflect the transition
occurring in the industry and the common vehicles composing the fleets of the large portion of delivery
couriers. For example, we consider the totally electric vehicle e-NV200 adopted in the “GoGreen”
programme [41] arose from the partnership between the automobile manufacturer Nissan Motor Co.
Ltd. and the international logistics company DHL Express.
In this section, we investigate the operating and environmental costs for each class of vehicles,
given their different environmental and economic impacts (e.g., investment, fleet management and
maintenance requirements, emissions). In particular, we estimate the Operating Costs per Kilometre
(OCK) related to each type of vehicle and then, compared them in order to identify the most
cost-efficient, considering the operative performance. For the purposes of this analysis, the OCK
includes both variable costs (e.g., gasoline) and the total cost of ownership, according to [42],
expressed in Euro per kilometres traveled in last mile segment [e/km], which the company incurs for
the use of the vehicle in a year of its technical life cycle. This cost is composed of variable costs and
fixed costs. The latter are not proportional to the distance and the courier incurs regardless of the
vehicles usage degree. The OCK function is:

OCK = ( FC + VC )/TK = ((v + tx + i + p) + ( f + t + mr ))/TK (1)

where:

• FC is the total annual fixed costs;

• VC is the total annual variable costs;
• TK is the total annual traveled kilometres.

The entity of each item has been estimated through primary data from market research on the
commercial practices applied by the different stakeholders and has been supported by the formulation
of specific assumptions on the use conditions of the vehicles benchmark. These assumptions are:

• total annual usage, in terms of traveled kilometres in the last mile segment, of about 25,000 km/year;
• a total annual usage, in terms of hours required to reach each destination and to do the delivery
operations, of about 2000 h/year;
• the commercial speed of vehicles in urban areas is about 35 km/h;
• each driver must make about 80 deliveries per day, with an average time of 4.5 min per delivery,
to perform all operations, from the parking of the vehicle to the collecting of the proof of delivery;
• each component of cost has charged in refers to the technical life cycle of the vehicle that has been
estimated of 5 years.

The components of fixed and variable costs are briefly described as follows.

• Purchase cost of vehicle (v): is based on estimates realized by the fleet manager section of several
car dealers, and is referred to a leasing agreement of 5 years, considering both the interest and
principal payments on the loans. During this period, the company operating in the transportation
and parcel delivery market on the last mile will provide a depreciation and amortisation schedule
of this asset. In particular, we adopt a straight-line depreciation, which represents the simplest
and most commonly used depreciation method in the market. It is based on time and thus, on the
Sustainability 2019, 11, 3439 14 of 23

total number of years the vehicle is expected to be a useful asset for the parcel delivery company
(i.e., the so-called “useful life”). In our case, we consider a life cycle of 5 years for both vehicles
and batteries.
• Vehicle taxes (tx): are referred to the expenditures and taxes related to the vehicles, according to
the current regulations, such as the ownership tax.
• Insurance (i): is the cost of the truck liability insurance based on the capacity of the vehicle and
the third party cargo insurance, while it excludes the theft and fire insurances, included in the
leasing agreement. Due to the liberalisation process that have interested in the 2014 the insurance
industry in different country including the Italy, and that have imposed the right to determine
independently the contract conditions and the tariffs, the amount of the policy considered refers to
an average value of the prices offered by several insurance companies, as emerged by a secondary
research conducted in this work.
• Personnel costs (p): is defined as the total remuneration payable by a driver, and also include
taxes and employees’ social security contributions, according to the National Collective Labour
Agreement prescribed for the category to which they belong.
• Vehicle fuelling ( f ): are referred to the costs related to the fuel supply, both fossil and diesel,
and to the powertrain. Their values are estimated considering the consumption derived from the
technical specifications provided by the manufacturer. For the petrol and diesel fuel, prices are
measured by the average monthly domestic prices from the statistical data elaborated by the
Italian Ministry of Economic Development for 2018. Otherwise, the electricity price is evaluated
as an average cost from the prices charged by major suppliers operating in the energy industry,
to a business customer.
• Tyres costs (t): are based on the list prices charged, by the leading manufacturers, discounted
by a corrective factor of 15% for the purchase of high quantities for the whole fleet. It is also
considered the average duration of a set of about 50,000 km/year referring to the capacity and
the wear out of the vehicle.
• Maintenance and repair costs (mr): estimated from the data provided by the Automobile Club
Italia (ACI) [43], they are related to the expenditures for the activities required to maintain
the effectiveness of the vehicle performance, along his life cycle, known the travelled distance.
These activities are classified in time or condition-based maintenance, which have the aim to
prevent negative events and to maintain the normal conditions of use. Otherwise, breakdown
maintenance or repair, which is conducted after a failure occurrence.

Tables 1–3 show the different cost items for the fossil-fuelled, diesel-fuelled and electric vehicles.
Sustainability 2019, 11, 3439 15 of 23

Table 1. Operating Costs per Kilometre related to the fossil fuelled vehicle.
Cost Item Benchmark Value Technical Life Cycle Annual Cost Commercial Speed Total km OCK
[e] [years] [e] [km/h] [km] [e/km]
Purchasing cost of vehicle
Advance payment 5000.00 5 1000.00 35 25,000 0.0400
Lease fees and other insurance 11,820.00 5 2364.00 35 25,000 0.0946
Stamp duty 16.00 5 3.20 35 25,000 0.0001
VAT 22% 3703.92 5 740.78 35 25,000 0.0296
Total purchasing cost of vehicle 20,539.92 4107.98 0.1643
Vehicle taxes
IPT 319.00 5 63.80 35 25,000 0.0026
DMV costs and PRA 100.00 5 20.00 35 25,000 0.0008
Stamp duty 208.98 208.98 35 25,000 0.0084
Total vehicle taxes 627.98 292.78 0.0117
Insurance
Average truck liability insurance costs 2680.33 35 25,000 0.1072
Total insurance cost 0.1072
Maintenance and repair costs
Maintenance and repair costs 0.0573
Total maintenance and repair costs 0.0573
Tyres costs
Average tyres costs 311.15 35 25,000 0.0124
Average tyres costs 0.0124
Personnel costs
Personnel costs 56,000.00 35 25,000 2.2400
Total personnel costs 2.2400
Vehicle Fuelling
Price per Litre Consumption Commercial Speed Total km Cost per Kilometre
[e/l] [e/100km] [km/h] [km] [e/km]
Average manufacturing price 0.5375 0.072 35 25,000 0.0387
Average production tax 1.0069 0.072 35 25,000 0.0725
Total vehicle fuelling costs 0.0112
TOTAL OCK e/km 2.7042

Table 2. Operating Costs per Kilometre related to the diesel fuelled vehicle.
Cost Item Benchmark Value Technical Life Cycle Annual Cost Commercial Speed Total km OCK
[e] [years] [e] [km/h] [km] [e/km]
Purchasing cost of vehicle
Advance payment 5000.00 5 1000.00 35 25,000 0.0400
Lease fees and other insurance 13,740.00 5 2748.00 35 25,000 0.1099
Stamp duty 16.00 5 3.20 35 25,000 0.0001
VAT 22% 4126.32 5 825.26 35 25,000 0.0330
Total purchasing cost of vehicle 22,882.32 4575.46 0.1831
Vehicle taxes
IPT 319.00 5 63.80 35 25,000 0.0026
DMV costs and PRA 100.00 5 20.00 35 25,000 0.0008
Stamp duty 170.28 170.28 35 25,000 0.0017
Total vehicle taxes 627.98 292.78 0.0102
Insurance
Average truck liability insurance costs 2680.33 35 25,000 0.1072
Total insurance cost 0.1072
Maintenance and repair costs
Maintenance and repair costs 0.0625
Total maintenance and repair costs 0.0625
Tyres costs
Average tyres costs 311.15 35 25,000 0.0124
Average tyres costs 0.0124
Personnel costs
Personnel costs 56,000.00 35 25,000 2.2400
Total personnel costs 2.2400
Vehicle Fuelling
Price per Litre Consumption Commercial Speed Total km Cost per Kilometre
[e/l] [e/100 km] [km/h] [km] [e/km]
Average manufacturing price 0.5593 0.048 35 25,000 0.0268
Average production tax 0.8763 0.048 35 25,000 0.0421
Total vehicle fuelling costs 0.0689
TOTAL OCK e/km 2.6843
Sustainability 2019, 11, 3439 16 of 23

Table 3. Operating Costs per Kilometre related to the electric vehicle.

Cost Item Benchmark Value Technical Life Cycle Annual Cost Commercial Speed Total km OCK
[e] [years] [e] [km/h] [km] [e/km]
Purchasing cost of vehicle
Advance payment 5000.00 5 1000.00 35 25,000 0.0400
Lease fees and other insurance 21,756.00 5 4351.20 35 25,000 0.1740
Battery rental fee 4320.00 5 864.00 35 25,000 0.0346
Stamp duty 16.00 5 3.20 35 25,000 0.0001
VAT 22% 6840.24 5 1368.05 35 25,000 0.0547
Total purchasing cost of vehicle 37,932.24 7586.45 0.3035
Vehicle taxes
IPT 319.00 5 63.80 35 25,000 0.0026
DMV costs and PRA 100.00 5 20.00 35 25,000 0.0008
Stamp duty - - -
Total vehicle taxes 419.00 83.80 0.0034
Insurance
Average truck liability insurance costs 932.50 35 25,000 0.0373
Total insurance cost 0.0373
Maintenance and repair costs
Maintenance and repair costs 0.0540
Total maintenance and repair costs 0.0540
Tyres costs
Average tyres costs 230.92 35 25,000 0.0092
Average tyres costs 0.0092
Personnel costs
Personnel costs 56,000.00 35 25,000 2.2400
Total personnel costs 2.2400
Vehicle Fuelling
Average Price of Electricity Consumption Commercial Speed Total km Cost per Kilometre
[e/kWh] [kWh/km] [km/h] [km] [e/km]
Average price of electricity 0.0672 0.1650 35 25,000 0.0111
Total vehicle fuelling costs 0.0111
TOTAL OCK e/km 2.6584

5.2. Environmental Costs Analysis

In compliance with the technical specification ISO/TS 14067:2013 “Greenhouse gases—Carbon
footprint of product—Requirements and guidelines for quantification and communication”, we compute
the carbon footprint of the last-mile deliveries, as the total direct (i.e., generated by fuel combustion process)
and indirect (i.e., originated by the fossil fuel production and the energy consumed during the charging of
batteries) greenhouses gas emitted by logistics activities. Concerning the source of electricity considered
in our study, we refer to the current practice in Italy and Europe where the adoption of coal and crude
oil is decreasing over the last 10 years, according to [44]. In particular, we consider that less than the
7% of the energy comes from the coal, 38% from natural gas, 20% from renewable sources and the
remaining part is oil. As we concentrate on the last-mile operations, we omit emissions from long-haul
transportation, vehicles manufacturing and their disposal. We also take into account all the pollutants
generated by the transportation activities (e.g., nitrogen oxides, particulate) which are converted into
CO2 , considering a conversion rate equals to 4.7 kg of CO2 per liter of fuel consumed [45].
Finally, in Table 4, we computed the social costs paid by the courier due to its environmental
impact. In particular, by applying a Pigouvian tax, named carbon tax, which refers to the price paid
for CO2 emissions in the atmosphere, we express the carbon footprint in monetary terms. This tax
mechanism aims to push the transportation operators in switching to innovative technologies and
tools that could make them more efficient and less pollutant, discouraging non-green behaviours.
As the carbon tax is not the same in all the countries, we consider two main levels of tariffs: 17 e/t
and 150 e/t, according to the French [46] and Swedish [47] taxation systems, respectively [46].
Sustainability 2019, 11, 3439 17 of 23

Table 4. Cost analysis results.

Costs Tariffs Carbon Tax [e/tons] Fossil Fuel Vehicle Diesel Fuel Vehicle Electric Vehicle Bike
TCK [e/km]
Annual kilometre cost 2.70 2.68 2.66 1.50
Environmental costs [e]
Direct CO2 Emissions [tons] 4.15 3.38
Indirect CO2 Emissions [tons] 4.15 3.38
Equivalent CO2 Emissions [tons] 8.46 5.52
Total Emissions [tons] 16.76 12.28
Carbon Tax [e] 17.00 284.92 208.63
30.00 502.80 368.18
90.00 1508.40 1104.53
150.00 2514.00 1840.88
Electric Battery Emissions [tons] 3.08
Carbon Tax [e] 17.00 52.31
30.00 92.31
90.00 276.94
150.00 461.56
Direct CO2 Emissions [tons] 0.00

Tables 2 and 3 show that the traditional subcontractors using fossil fuel vehicles incurs in a higher
cost than the green subcontractors. Electric vehicles enable reduced insurance tariffs and exemption
from ownership tax, obtaining cost savings than traditional vans. However, few electric vehicles are
still used in the market due to their high setup costs related to the purchasing cost of the van and
battery rental fees. The reduced costs of bikes and personnel costs, given that the riders do not need
any driving license and the working hours are limited, increase the economic efficiency of the bike
couriers. Indeed, they incur in a operative costs equal to 1.50 e/km.
Moreover, the green subcontract benefits from the additional income by the selling of carbon
credits. In fact, as shown by Table 5, when the carbon credit prices are 30% lower than the carbon tax
tariffs, the engagement of green subcontractors generate an additional revenue equals to 0.02 e per
stop, which becomes notably, considering high volumes of parcels that have as a destination the city.

Table 5. Revenue streams from carbon credit trading.

Buyer Emissions [tons] Seller Emissions [tons] ∆ Emissions [tons] Carbon Credit Prices [e/tons] Revenue [e]
Fossil Fuel Vehicle vs. Electric Vehicle
16.76 0.02 16.74 11.90 199.21
21.00 351.54
63.00 1054.62
105.00 1757.70
Diesel Vehicle vs. Electric Vehicle
12.27 0.02 12.25 11.90 145.80
21.00 257.30
63.00 771.91
105.00 1286.51
Fossil Fuel Vehicle vs. Bike
0.000421 0.00 0.000421 11.90 0.005
21.00 0.009
63.00 0.027
105.00 0.044
Diesel Vehicle vs. Bike
0.000308 0.00 0.000308 11.90 0.004
21.00 0.006
63.00 0.019
105.00 0.032

6. Results
The findings emerged in the costs analysis have been used as input in a decision-support system
developed for designing appropriate policies for heterogeneous fleet. The overall system is based on
Sustainability 2019, 11, 3439 18 of 23

the simulation-optimisation approach integrating a Monte Carlo simulation, a last-mile optimisation

meta-heuristic, and data aggregation and analytic module. The interested reader is referred to [6],
for the complete description of the decision-support system and technical details of the simulator.
To conduct the computational experiments, we considered three instance settings I1, I2, and I3,
with a number of parcels in the range [1000; 4000]. These instances are created from realistic analytics
gathered during three weeks at the end of 2014 and the beginning of 2015 by a medium-sized courier.
As shown by Table 6, this data set is heterogeneous in terms of parcels composition as it considers
three types of parcels, according to the classification proposed by the European Commission and [6].
Thus, we classify parcels as follows: “mailer,” (0–3 kg), “small parcels” (3–6 kg), and “large deliveries”
(more than 6 kg). Mailers cover the largest portion of the parcels that have as destination the city,
given the increasing impact of e-commerce. Moreover, these parcels are easy to handle for the green
subcontractors and to moved by bikes. Thus, mailers are more profitable for both subcontractors,
counting a great part of their critical mass to make their business models sustainable.

Table 6. Classes of parcels and delivery locations.

Parcel Delivery Features n. Delivery %

In center 3395 22.51
Out of center 11,688 77.49
0–3 kg 8577 56.87
3–6 kg 1915 12.70
>6 kg 4590 30.43
Total deliveries 15,083 100.00

Combining the information related to the classes of parcels and the geographical area served by
the green subcontractors, we define five operational scenarios:

• Scenario S_0. The traditional subcontractor manages all deliveries in the considered area:
• Scenario S_3_C. The green subcontractor delivers mailer parcels in the inner city, while the traditional
subcontractor manages all remaining categories in both the central and semi-central areas.
• Scenario S_3_S. Compared to the previous scenario, the green subcontractor delivers mailers
also in the semi-central areas, while the traditional subcontractor manages the small parcels and
large deliveries.
• Scenario S_5_C. In this scenario, the mailers and small parcels in the central area are outsourced
to the green subcontractor. The traditional subcontractor manages the large deliveries in the
whole city and the small parcels in semi-central areas.
• Scenario S_5_S. In this scenario, the green subcontractor deliver mailer and small parcels in both
the central and semi-central area, while the traditional one delivers only large parcels.

To evaluate the integration of traditional vehicles and those with a low environmental impact,
particularly the cargo bikes, we measured different key performance indicators (KPIs), that reflect the
following perspectives:

• Economic Sustainability. As discussed above, the subcontracts incur in operating costs related
to fleet management and maintenance, and personnel costs associated with drivers. To monitor
this aspect, we compute the number of equivalent vehicles used by the subcontractors (Veh Eq)
and we consider the OCK costs derived in Section 5. As in the study by [6], we express the
VehEq measure related to bikes in terms of vans, according to the duration of a working day
of a traditional subcontractor in the European countries, composed by six-and-a-half hours.
This conversion makes possible the comparison between the performance of the traditional and
of the green subcontractors.
Sustainability 2019, 11, 3439 19 of 23

• Environmental Sustainability. As highlighted by the managerial analysis, the value proposition of

new business models based on cargo bikes is to reduce the environmental impact of transportation
and parcel delivery activities. Thus, we compute the kilograms of CO2 (in compliance with the
regulation ISO/TS 14067:2013) not emitted in the scenarios with cargo bikes, and we express
this measure as the CO2 savings (CO2 Sav). Due to the negative impact of these emissions on
society, we need to consider also the social costs paid by the traditional subcontractors for their
externalities. Thus, we express these CO2 saving in monetary terms as social costs savings,
applying the carbon tax used in Table 4.
• Operational Sustainability. Finally, to evaluate in what extents the introduction of green delivery
vehicles impacts on the operative performance and the efficiency of the traditional courier,
we compute the number of parcels delivered per hour (nD/h).

Table 7 presents the results obtained by the experiments. On the one hand, the delivery of mailers
and small parcels using cargo bikes allows reducing the total emissions of about 14 tons per year,
corresponding to an amount of CO2 savings equals to more than 40%. Notice that the value of the
CO2 savings in each scenario is computed as the emissions in that scenario minus the emission in
the scenario (S_0), then expressed in terms of social costs savings. Another valuable outcome is that
the area served by using bike has a huge role in that result. Indeed, the scenarios in which the green
subcontractors access to both the central and semi-central areas (i.e., S_3_S and S_5_S) have higher
CO2 savings than scenarios S_3_C and S_5_C. The reason is that the traditional subcontractors no
longer serve these areas, and thus the routes traveled by vans are reduced by 25%, with consequent
benefits in terms of emissions and costs.
On the other hand, outsourcing mailers and small parcels to one or more green subcontracts that
own their green fleets leads to a reduction of the traditional subcontractor performance, in terms of
the operational efficiency and profitability. For example, in scenarios S_5_C and S_5_S the traditional
subcontractor manages only large parcels, which usually require much time to be handled and
delivered, with consequent reduction of the needed vehicles (e.g., in Set I1 the value of VehEq fall from
7.49 to less more than 2 or 3), increase of the total service time and reduction of the number of deliveries
fulfilled in a day. This number is also undermined by the rapid saturation of vans capacity (due to the
large sized of handled parcels) that imposes to the traditional subcontractors, frequent returns to the
depots. Indeed, Table 7 highlights a reduction of up to five deliveries per hours moving from scenario
to S_0 to the other scenarios using bikes. This reduction corresponds to a loss of efficiency of about
15% ad more than 30% when respectively mailers and, mailers and small parcels are handled by the
green subcontractors.
To guarantee a well-functioning of the system, the inefficiency of the traditional subcontractor
should be mitigated by an increase of the 130 deliveries per day managed by the green subcontractors,
which represents an unfeasible target to achieve. Moreover, considering that the actual contractual
schemes imply revenues based on the operational performance and penalties on the failed deliveries,
the above-mentioned result may be compromising for the profitability of both operators.
These findings suggest some insights to the managers operating in the urban freight transportation
and parcel delivery to derive sustainable policies and the balanced mix of traditional and green delivery
modes. In particular, when the traditional subcontractor owns its fleet, it should outsource only the
mailers in central and semi-central areas and small parcels in downtown, to avoid a large decrease
of efficiency, while increasing the service quality perceived by customers. In this case, the green
subcontractor will be able to deliver all the demand of assigned mailers and small parcels in the areas
most affected by traffic and congestion, where its value proposition becomes strong, thus reaching the
critical mass to sustain its model. In the case of the external fleet, the traditional subcontract should
internalise the green fleet or outsource mailers in central and semi-central areas, while the outsourcing
of small parcels requires the changing of the contractual scheme, to avoid the erosion of the margins.
Moreover, the green subcontractor should balance the reduced revenues (due to fewer deliveries to
manage, compared with the previous case), by the reselling of so-called “green credits”.
Sustainability 2019, 11, 3439 20 of 23

Table 7. KPIs values generated by the Monte Carlo simulation. Note that in the scenario S_0, the KPIs
referred to the green subcontractor have no values, as it is not involved in the parcel delivery.

KPI Instances Traditional Subcontractor Green Subcontractor

S_0 S_3_C S_3_S S_5_C S_5_S S_0 S_3_C S_3_S S_5_C S_5_S
I1 15.65 12.82 12.98 10.44 10.38 NA 11.94 11.24 12.47 11.94
nD/h I2 16.18 13.79 13.77 10.92 10.73 NA 12.03 11.36 12.51 12.06
I3 15.47 13.29 13.01 10.50 10.21 NA 11.82 11.16 12.56 12.04
I1 7.49 2.16 3.53 2.28 3.62 NA 3.70 6.55 3.88 6.88
VehEq I2 9.89 3.03 4.86 3.07 4.98 NA 4.96 8.39 5.45 9.02
I3 8.40 2.54 4.18 2.70 4.41 NA 3.85 6.89 4.12 7.14
I1 NA 22% 34% 27% 45%
CO2Sav I2 NA 16% 34% 26% 44%
I3 NA 16% 41% 20% 48%

7. Conclusions
In this paper, we analysed from a managerial standpoint the co-existence of traditional (i.e., based
on the adoption of vans) and new green (i.e., using low emissions vehicles as cargo bikes) business
models to perform the freight transportation and parcel delivery within the city areas. The failure of
several City Logistics initiatives was highlighted, as such integration is no small matter. Indeed,
a proper balance between these models must be guaranteed by the decision-makers to avoid the
cannibalisation of the two services and a damaging price war that erodes the margins and the
profitability of the companies involved. In doing so, it is important to have a system view of this
industry, considering the business profiles of the different stakeholders involved, as well as their costs
and revenues structure. Unfortunately, this type of holistic vision does not receive too much attention
in the literature.
We contributed to overcoming this gap first proposing a complete analysis of the business models
of the major stakeholders playing a key role in the integration of traditional and green delivery systems.
Moreover, we understood the features and competitiveness of the eco-system, identifying opportunities,
threats and strategies’ potential profitability. Then, we investigate the costs and revenues structures
of the companies (we referred to the traditional and green subcontractor couriers, respectively) that
manage the urban parcel delivery. These analyses have been conducted by means of lean business
tools and techniques. Finally, we presented some relevant results and managerial insights derived by
applying simulation-optimisation tools to the outcomes of the previous analyses.
We can use these results to make some recommendations. First, the decision-makers have to design
mixed-fleet policies, which do not aim only at the environmental sustainability that, however, would
benefit from the adoption of low emission vehicles, but also look at the feasibility and, operational and
economic sustainability of both traditional and green business models. Second, to deploy a winning
strategy for all the actors involved in the system, a holistic vision is needed. This must integrate
qualitative and quantitative approaches linked in a proper way to assess the co-existence of different
transportation modes, which are not considered individually, but parts of a unique whole system.
Third, the green business models based on the adoption of cargo bikes have beneficial effects on
the environmental protection, but also on the operations. In fact, they emerge as the most flexible
transportation modes to cope with the increasing uncertainty (e.g., related to demand and travel times)
originated by the growing requests connected to the on-demand economy.
Despite the interesting results, this paper presents some limitations, which will be the subject
of future research. First, the decision-support system developed do not cover all the operational
issues (e.g., the crowdsourcing) and modes (e.g., automatic vehicles, drones and fully electric vehicles).
Second, the related study in [6] proposes a sensitivity analysis on the composition of the demand,
which is one of the most relevant parameters affected by uncertainty in the urban context. However,
Sustainability 2019, 11, 3439 21 of 23

the current study lacks of further sensitivity analyses. In particular, to our vision, an interesting one
considers the tariff schemes paid to the contractor. This analysis requires the development of a bi-level
programming optimisation model, which is still not available in the literature, for the time being.
Thus, it could be an interesting direction for future research.

Author Contributions: Authors contributed equally to design the research and writing the paper. All authors
proofread and approved the final manuscript.
Funding: This research was funded by Politecnico di Torino under the interdepartmental Center for Automotive
Research and Sustainable mobility (CARS) initiative.
Acknowledgments: While working on this paper, the second author was the Director of the ICT for City Logistics
and Enterprises Lab and the the head of the Urban Mobility and Logistics Systems (UMLS) initiative of the
interdepartmental Center for Automotive Research and Sustainable mobility (CARS) at Politecnico di Torino, Italy.
Conflicts of Interest: The authors declare no conflict of interest.

References
1. Dablanc, L. City distribution, a key element of the urban economy: Guidelines for practitioners. In City
Distribution and Urban Freight Transport: Multiple Perspectives; Edward Elgar Publishing: Cheltenham, UK,
2011; Volume 1, pp. 13–36.
2. Taefi, T.T.; Kreutzfeldt, J.; Held, T.; Fink, A. Supporting the adoption of electric vehicles in urban road freight
transport—A multi-criteria analysis of policy measures in Germany. Transp. Res. Part A 2016, 91, 61–79.
[CrossRef]
3. Perboli, G.; Rosano, M.; Saint-Guillain, M.; Rizzo, P. Simulation-optimization framework for City Logistics.
An application on multimodal last-mile delivery. IET Intell. Transp. Syst. 2018, 12, 262–269. [CrossRef]
4. Perboli, G.; Rosano, M. A Decision Support System for Optimizing the Last-Mile by Mixing Traditional
and Green Logistics. In Information Systems, Logistics, and Supply Chain. ILS 2016. Lecture Notes in Business
Information Processing; Temponi, C., Vandaele, N., Eds.; Springer: Cham, Switzerland, 2018; Volume 262,
pp. 28–46.
5. Tadei, R.; Fadda, E.; Gobbato, L.; Perboli, G.; Rosano, M. An ICT-Based Reference Model for E-grocery in
Smart Cities. Lect. Notes Comput. Sci. 2016, 9704, 22–31.
6. Perboli, G.; Rosano, M. Parcel delivery in urban areas: Opportunities and threats for the mix of traditional
and green business models. Transp. Res. Part C 2019, 99, 19–36. [CrossRef]
7. Perboli, G.; De Marco, A.; Perfetti, F.; Marone, M. A New Taxonomy of Smart City Projects.
Transp. Res. Procedia 2014, 3, 470–478. [CrossRef]
8. Marcucci, E.; Gatta, V.; Marciani, M.; Cossu, P. Measuring the effects of an urban freight policy package
defined via a collaborative governance model. Res. Transp. Econ. 2017, 65, 3–9. [CrossRef]
9. Russo, R.; Comi, A. A classification of city logistics measures and connected impacts. Procedia Soc. Behav. Sci.
2010, 2, 6355–6365. [CrossRef]
10. Gevaersa, R.; Van de Voorde, E.; Vanelslera, T. Cost Modelling and Simulation of Last-mile Characteristics in
an Innovative B2C Supply Chain Environment with Implications on Urban Areas and Cities. Procedia Soc.
Behav. Sci. 2014, 125, 398–411. [CrossRef]
11. Morganti, E.; Seidel, S.; Blanquart, C.; Dablanc, L.; Lenz, B. The Impact of E-commerce on Final Deliveries:
Alternative Parcel Delivery Services in France and Germany. Transp. Res. Procedia 2014, 4, 178–190. [CrossRef]
12. Taniguchi, E. Concepts of city logistics for sustainable and liveable cities. Procedia Soc. Behav. Sci. 2014, 151,
310–317. [CrossRef]
13. De Marco, A.; Mangano, G.; Zenezini, G. Classification and benchmark of City Logistics measures:
An empirical analysis. Int. J. Logist. Res. Appl. 2018, 21, 1–19. [CrossRef]
14. Leonardi, J.; Browne, M.; Allen, J. Before-After Assessment of a Logistics Trial with Clean Urban Freight
Vehicles: A Case Study in London. Procedia Soc. Behav. Sci. 2012, 39, 146–157. [CrossRef]
15. Dablanc, L. City distribution, a key element of the urban economy: Guidelines for practitioners. City Distrib.
Urban Freight Transp. 2011, 1, 13–36.
Sustainability 2019, 11, 3439 22 of 23

16. Conway, A.; Fatisson, P.; Eickemeyer, P.; Cheng, J.; Peters, D. Urban micro-consolidation and last mile
goods delivery by freight-tricycle in Manhattan: Opportunities and challenges. In Proceedings of the
Conference proceedings. Transportation Research Board 91st Annual Meeting, Washington, DC, USA,
22–26 January 2012.
17. Janjevic, M.; Ndiaye, A.B. Development and application of a transferability framework for micro-consolidation
schemes in urban freight transport. Procedia Soc. Behav. Sci. 2014, 125, 284–296. [CrossRef]
18. Schliwa, G.; Armitage, R.; Aziz, S.; Evans, J.; Rhoades, J. Sustainable city logistics. Making cargo cycles
viable for urban freight transport. Res. Transp. Bus. Manag. 2015, 15, 50–57. [CrossRef]
19. Lenz, B.; Riehle, E. Bikes for urban freight. Transp. Res. Rec. J. Transp. Res. Board 2013, 2379, 39–45. [CrossRef]
20. Navarro, C.; Roca-Riu, M.; Furió, S.; Estrada, M. Designing new models for energy efficiency in urban freight
transport for smart cities and its application to the Spanish case. Transp. Res. Procedia 2016, 12, 314–324.
[CrossRef]
21. Baldacci, R.; Battarra, M.; Vigo, D. Routing a Heterogeneous Fleet of Vehicles. In The Vehicle Routing Problem:
Latest Advances and New Challenges; Springer: Boston, MA, USA, 2008; Volume 43, pp. 3–27.
22. Molina, J.C.; Eguia, I.; Racero, J.; Guerrero, F. Multi-objective vehicle routing problem with cost and emission
functions. Procedia Soc. Behav. Sci. 2014, 160, 254–263. [CrossRef]
23. The GUEST Initiative. 2017. Available online: http://www.theguestmethod.com (accessed on 19 April 2019).
24. Perboli, G. The GUEST Methodology. 2017. Available online: http://staff.polito.it/guido.perboli/GUEST-
site/docs/GUEST_Metodology_ENG.pdf (accessed on 19 April 2019).
25. Osterwalder, A.; Pigneur, Y. Business Model Generation. A Handbook for Visionaries, Game Changers, and Challengers;
John Wiley and Sons, Inc.: Hoboken, NJ, USA, 2010.
26. Perboli, G.; Ferrero, F.; Musso, S.; Vesco, A. Business models and tariff simulation in car-sharing services
Transp. Res. Part A Policy Pract. 2018, 115, 32–48.
27. Perboli, G.; Musso, S.; Rosano, M.; Tadei, R.; Godel, M. Synchro-modality and slow steaming: New business
perspectives in freight transportation. Sustainability 2017, 9, 1843. [CrossRef]
28. Kim, G.; Ong, Y.S.; Heng, C.K.; Tan, P.S.; Zhang, N.A. City Vehicle Routing Problem (City VRP): A Review.
IEEE Trans. Intell. Transp. Syst. 2015, 16, 1654–1666. [CrossRef]
29. URBeLOG Project Web Site. Available online: http://www.urbelog.it/ (accessed on 11 April 2019)
30. De Marco, A.; Mangano, G.; Zenezini, G.; Cagliano, A.C.; Perboli, G.; Rosano, M.; Musso, S. Business
Modeling of a City Logistics ICT Platform. In Proceedings of the 2017 IEEE 41st Annual Computer Software
and Applications Conference (COMPSAC), Turin, Italy, 4–8 July 2017.
31. Giusti, R.; Iorfida, C.; Li, Y.; Manerba, D.; Musso, S.; Perboli, G.; Tadei, R.; Yuan, S. Sustainable and
De-Stressed International Supply-Chains Through the SYNCHRO-NET Approach. Sustainability 2019,
11, 1083. [CrossRef]
32. Montwiłł, A. The role of seaports as logistics centers in the modelling of the sustainable system for
distribution of goods in urban area Procedia Soc. Behav. Sci. 2014, 151, 257–265. [CrossRef]
33. Bonney, J. Carriers Move Full Speed into Slow Steaming. JOC 2010. Available online: http://www.joc.com/
maritime/carriers-move-full-speed-slow-steaming (accessed on 31 May 2019).
34. Lee, C.Y.; Lee, H.; Zhang, J. The impact of slow ocean steaming on delivery reliability and fuel consumption.
Transp. Res. Part E 2015, 76, 176–190. [CrossRef]
35. Venturini, G.; Iris, Ç.; Kontovas, C.A.; Larsen, A. The multi-port berth allocation problem with speed
optimization and emission consideration. Transp. Res. Part D 2017, 54, 142–159. [CrossRef]
36. Caroli, M.G.; Monarca, U.; Simonelli, F.; Valentino, A. The Nusiness Model of International Express Couriers.
From Value Chain to Policy Indications, LUISS Business School and AICAI. 2010. Available online:
http://www.aicaionline.it/kdocs/48400/AICAI_SUMMARY_UK.pdf (accessed on 19 April 2019).
37. Cook, R.A.; Lodree, E.J. Dispatching policies for last-mile distribution with stochastic supply and demand.
Transp. Res. Part E 2017, 106, 353–371. [CrossRef]
38. Visser, J.; Nemoto, T.; Browne, M. Home delivery and the impacts on urban freight transport: A review.
Procedia Soc. Behav. Sci. 2014, 125, 15–27. [CrossRef]
39. Zhang, Y.; Sun, L.; Hu, X.; Zhao, C. Order consolidation for the last-mile split delivery in online retailing.
Transp. Res. Part E 2019, 122, 309–327. [CrossRef]
Sustainability 2019, 11, 3439 23 of 23

40. Riehle, E.B. Cargo Bikes as Transportation Vehicles for Urban Freight Traffic. Study on European Business Examples
to Estimate the Parameters and Potential for German Cities; Faculty of Spatial Planning, TU Dortmund University:
Dortmund, Germany, 2012.
41. NISSAN. Nissan and DHL Test e-NV200. Available online: http://www.nissan-global.com/EN/NEWS/
2013/_STORY/130712-01-e.html (accessed on 5 December 2018).
42. Canadian Automobile Association. Driving Cost Beyond the Price Tag: Understanding Your Vehicle’s Expenses;
Canadian Automobile Association: Ontario, ON, Canada. Available online: https://www.caa.ca/wp-
content/uploads/2016/09/CAA_Driving_Cost_English_2013_web.pdf (accessed on 11 June 2019).
43. Automobile Club Italia. Available online: http://www.aci.it (accessed on 19 April 2019).
44. International Energy Agency. World Energy Balances 2018 Edition; Data & Publications: Paris, France, 2018.
Available online: https://webstore.iea.org/world-energy-balances-2018 (accessed on 11 June 2019).
45. Knörr, W. EcoPassenger: Environmental Methodology and Data; Final Report; IFEU—Institut für Energie-und
Umweltforschung Heidelberg GmbH: Heidelberg, Germany, 2008.
46. Elbeze, J. The reform of energy taxation: An extension of carbon pricing in France. Policy Brief 2014, 6.
47. Johansson, B. Economic Instruments in Practice 1: Carbon Tax in Sweden. Swedish Environmental Protection
Agency. Available online: https://www.oecd.org/sti/inno/2108273.pdf (accessed on 3 January 2019).

© 2019 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access
article distributed under the terms and conditions of the Creative Commons Attribution
(CC BY) license (http://creativecommons.org/licenses/by/4.0/).